Question

Difference between mercantile basis and cash basis

Answer 1

Answer:

Explanation:

The main difference between accrual and cash basis accounting lies in the timing of when revenue and expenses are recognized. The cash method is a more immediate recognition of revenue and expenses while the accrual method focuses on anticipated revenue and expenses.

Answer 2

Mercantile system of accounting requires recording all transactions when they accrue or when they become due. Under cash system of accounting, transactions are only recorded when actually paid or received. Mercantile system is applicable for salaries, income from property and capital gains.